Suspended Bethel official says he acted in city's best interest

Nathaniel Herz

With his job at stake at a city council meeting next week, Bethel's city manager acknowledged that he had violated municipal code but said all of his actions had been out in the open and in the city's best interests.

Lee Foley has been suspended since April 22 as an attorney hired by council members investigates potential violations of city nepotism rules, procurement procedures and other policies.

The seven council members in the Southwest hub community of 6,300 have a special meeting scheduled Monday to decide whether to keep Foley or fire him -- though if they opt for the latter option, they'll have to pay him three months of severance, according to Mayor Joe Klejka.

In an interview this week in Anchorage, Foley said he wants to finish his contract, which runs through the end of next year.

"I'm not a dishonest person, and I know how to take care of business," he said. "Nothing was done without taking the best interests of the city in mind."

Over coffee, he explained his rationale behind several decisions that have run afoul of the council and jeopardized what he said is his $104,000-a-year job supervising 120 employees and a $11.5 million annual budget.

Among those decisions was authorizing the hiring of his son, even though that was barred by city code; awarding a demolition contract to a company that owed the city money without a request for proposals; giving the city's former finance director a consulting contract, also without a request for proposals; and allowing department heads to make personal charges on city credit cards, and making one charge himself, which all appear to have been paid back.

While Foley said he supports the idea of the council's investigation, he added that members' concerns are minor in the grand scheme of running the city, which has been facing a sharp revenue decrease while a local utility is being purchased by a nonprofit organization, a change that is expected to leave Bethel with lower tax revenue.

"We're so focused in on little small things that we lose sight of the big things that need to be done in the city," Foley said. He said he awarded the $30,000 demolition of Bethel's old police station to Faulkner-Walsh Constructers, which was in debt to the city, because he had asked other contractors around town and none were interested -- and, he added, he had been under pressure from the city council to get the job done.

"They owed the city money. It looked to me like a win-win," he said, though he acknowledged that he had not followed procurement rules. "The city didn't have to take nothing out of its own pocket. Faulkner and Walsh paid off their debt to the city. And the thing was moved and got rid of."

Klejka, the mayor, responded that in fact, he had heard from another Bethel contractor who said he would have paid the city for the building.

Foley said he couldn't find anyone, but he hadn't issued a request for proposals, Klejka said. "How hard did you actually look?" he added.

As for his son's employment, which began nearly five years ago, Foley said that it had not been a secret -- and he noted that his son, at 6 feet 8 inches tall, is hard to miss.

"They knew. Everyone well knew. They just chose to ignore it," he said, adding that one of the city council members is Bethel's former municipal attorney.

Foley added he had only authorized the hire; the decision, he said, was made by one of his subordinates. And, he said, in the past, others have violated Bethel's nepotism rules, which prohibit employment of relatives of the city manager and council members.

Klejka said that he personally had not been aware of the city's nepotism rules, and added that as Bethel's top employee, it was Foley's responsibility to know them.

"He's supposed to be running the city -- he should know better," he said.

Finally, Foley acknowledged he had used his city-issued credit card for a personal expense and allowed some of Bethel's department heads to the same, though he has since issued a memorandum saying the practice is unacceptable.

All the spending was reimbursed, both Foley and Klejka said, though Klejka added in at least one case, the expenses had not been paid in the month they were incurred.

"In retrospect, they shouldn't have been allowed to do that," Foley said.

One of the department heads who had been allowed to use his city credit card for personal expenses, Foley said, was former city finance director Bobby Sutton, whose relationship with the city also came under scrutiny during the investigation.

When Sutton decided he wanted to leave Bethel for Kentucky, Foley allowed him to keep working as a city employee remotely, then later gave him a contract -- without offering the work competitively -- that paid him $75 an hour.

As the former finance director for the city, Foley said, Sutton's experience was needed to get through annual budget work -- and, he added, he valued Sutton's past contributions to Bethel.

"That means a lot to me, and it should mean something to the city," Foley said.

Sutton did not return a phone message left earlier this week.

Foley maintained that he did not deserve to be fired for any of his offenses; they helped and benefited the city, he said.

"If they try to terminate me over that and not give me my severance, then I'll go to every media in the state of Alaska, and they'll wish they never heard of me," he said.

Klejka said even if the council decides to fire Foley, "we are stuck in a contract that guarantees him three months of severance, regardless."

While Foley maintained that none of his actions had been hidden, Klejka said the council hadn't been expressly informed about Foley's "special deals."

Regardless, a more public discussion of city business before the investigation arose likely would have resolved many of Bethel's current problems, said Kathie Wasserman, executive director of the Alaska Municipal League, the nonprofit organization that represents Alaska's local governments.

"I just think it's best to get all this stuff out front. Local government should be the shining star in this state about open government," she said. "As far as getting things on the table to the public, and to everyone, right off the bat is the only way to go."

Reach Nathaniel Herz at or 257-4311.